Cryptocurrency: what are the differences between Bitcoin and altcoins?
Bitcoin remains the market leader for cryptocurrencies, but thousands of competitors have merged in the last decade to challenge its dominance.
Since Bitcoin stormed into people’s consciousness in 2018, many have tried to replicate its success. These are the altcoins, simply ‘alternative coins’. As Bitcoin has been hitting higher and higher heights, culminating in its highest dollar exchange rate back in November 2021 of $64,400 to one Bitcoin, challengers in the altcoins have been exploring ways to challenge their predecessors market dominance. One of these is Ethereum, which is a cryptocoin which has been at the front of the NFT marketplace and is the central currency used for purchasing NFTs.
The difference is quite easy to understand. Simply put, Bitcoin was the first cryptocurrency and altcoins just stands for all other cryptocurrencies that have been created since. Altcoins is an umbrella term for Bitcoin’s competitors, while Bitcoin stands for, well, Bitcoin.
Bitcoin: the pioneer
Bitcoin came into existence in 2009 after the concept of a decentralized digital currency was presented by its creator Satoshi Nakamoto, a false name. Since then, it has become the standard for cryptocurrencies that use peer-to-peer networks to keep a ledger of all transactions.
This peer-to-peer network is known as the Blockchain and it is the crucial foundation that all cryptocurrencies are built upon. The Blockchain is a database for storing crypto-based information. What is special about this database is that the records are decentralized and not controlled by a third party. Once each 'block' of data has been filled, the system starts filling up another. This means there is a clear timeline of transactions that can't be tampered with, keeping user’s data and investments safe.
Since Bitcoin was introduced, other coins have been set up to emulate their founder.
Altcoins: the competitors
As mentioned, altcoins include all cryptocurrencies that are not Bitcoin. According to aggregate site statista, there are over 10,300 altcoins globally. These range from tiny coins that are only just beginning to joke coins like Dogecoin. Originally started to troll crypto users, Dogecoin became a beast of its own. It had next to no value until the coin was taken up by Reddit, from which its value increased tenfold.
Another example is Ethereum which are oft used for the buying and selling of NFTs. NFT stands for “non-fungible token,” and it can technically contain anything digital, including drawings, animated GIFs, songs, or items in video games. Non-fungible means it is individual. The opposite, fungible, has examples like Bitcoin. One bitcoin can be swapped for another; they are identical. However, no two NFTs are the same.
What similarities do the different coins have?
Something all crypto coins have in common is that none of them are good for the environment. Bitcoin, used as much energy as the whole of Angola in 2017, and considering the amount of time that has passed since this footprint can only be larger.
For another example, a report from The New York Times claims that the creation of an average NFT brings with it ”over 200 kilograms of planet-warming carbon, equivalent to driving 500 miles in a typical American gasoline-powered car.” As the world makes moves to become more sustainable, efforts will have to be made to make cryptocurrencies more sustainable.